week04 - ECON 2 1H 1I Liao Pei-Ju Ch6 FALL 2007 Week04...

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ECON 2 1H 1I Ch6 FALL 2007 Liao, Pei-Ju Week04 : Oct.25/Oct.26 1 z Calculating GDP Expenditure approach : GDP=C+I+G+(EX-IM) Income approach : GDP Plus: receipts of factor income from the rest of the world Less: payments of factors income to the rest of the world Equals: GNP Less: Depreciation Equals: Net national product (NNP) Less: Statistical discrepancy Equals: National Income (NI) Less: Amount of national income not going to households Equals: Personal income (PI) Less: Personal income tax Equals: Disposable personal income (DI) Less: Personal consumption expenditure Less: Personal interest payments Less: Transfer payments made by households Equals: Personal saving (PS) z Nominal vs. Real GDP Nominal GDP (NGDP) : GDP measured in current dollars. Real GDP (RGDP) : Nominal GDP adjusted for price changes . Percentage change (growth rate)=[(x 2 -x 1 )/x 1 ]*100 Geometric average=square root of (x 1 *x 2 ) GDP deflator : a measure of the overall price level. GDP deflator=(NGDP/RGDP)*100. z Essay Questions 1. (M2F06) The following is known about the macro economy of Ekonland. Based on the information, compute Ekonland’s GDP, GNP, NNP, NI, PI, and DI. Show your computations.
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